Picture-based insurance uses digital technology to accurately and effectively measure crop losses under indemnity insurance models. This simple process could reduce the basis risk faced by farmers, ensuring they receive fair compensation for losses, and expedite the claim reporting process. For insurers, PBI could reduce verification costs, especially in remote areas and increase demand for insurance.
Process summary from a recent IFPRI pilot study:
Picture based solutions can be easily paired with other digital tools and information to assess and mitigate risks.
IFPRI has studied PBI programs across different contexts, identifying what works and where. This analysis also identifies opportunities to pair PBI with other interventiosn, such as providing improved crop varieties or microfinance, which can lead to increased farm productivity.
Where we work
IFPRI and its partners are testing this approach in different locations in Kenya and India. While initially, the research was focused on providing a proof of concept for the technology, our current focus is on analyzing how improved crop monitoring affects insurance markets and whether the technology has applications beyond insurance.
In addition, the research program analyzes the impacts of services facilitated by this technology, such as insurance, seeds or credit, on smallholder farmers’ productivity, welfare and resilience, while paying attention to mechanisms through which the technology can reduce—rather than aggravate—inequity and gender gaps.
